In this week's valuation, I try to illustrate the importance
of narrative in valuation, using Uber as my example.
In particular, as Uber's profile and estimated value
(based on VC investments) soars, it is worth asking what the company's value is
and what that value depends on.

The place to begin this journey is with this blog post that I
had on Uber in December, where I looked at the different
narratives (stories) you can tell about how Uber will
evolve over time. Thus, the post starts with the fundamental question of what
type of business you believe Uber is in, with your
choices ranging from urban car service (taxicabs and limo services) to
transportation (where Uber becomes an alternative to
buying a car), thus determining your total market potential. It then moves on
to questions about whether Uber has a local or a
global network benefit (which determines the market share that you use in the
valuation), how strong and sustainable its competitive advantages are (which
determine margins) and what you think the chances are that the company will not
make it. The spreadsheet that is attached to the post takes your choices and
converts them into a value for Uber.

Once you are done with your narrative choices and come up
with a value for Uber, please do go into the Google
shared spreadsheet that is also linked to in the post and enter your estimated
value for Uber.